CEE MARKETS-Polish bank stocks hit 19-month low amid corruption scandal


 * Polish bank stocks hit 19-month low, zloty a 2-week low * Corruption scandal knocks down Polish bank shares * Brexit chaos weighs on zloty (Recasts with plunge of Polish stocks and zloty) By Sandor Peto and Alicja Ptak BUDAPEST/WARSAW, Nov 16 (Reuters) - Warsaw's bank stock
index plunged to a 19-month low on Friday, extending a week-long
rout amid a corruption scandal which caused the head of Poland's
financial markets regulator to step down earlier in the week. Bank shares have fallen 8 percent since Tuesday when Marek
Chrzanowski resigned after the owner of Getin Noble Bank
, Leszek Czarnecki, alleged he tried to extract a
multi-million dollar bribe from him. Chrzanowski denies the
accusations. The scandal has compounded concerns over the financial
health of Czarnecki's lenders Getin Noble Bank and Idea Bank,
and the wider sector. Getin's shares plunged 17.5 percent. PKO Bank and
Alior Bank shed almost 6 percent and Bank Pekao almost 5 percent. "(Investors) are afraid of what could happen over the
weekend with Leszek Czarnecki's banks as an effect of this
week's events," said Lukasz Janczak, an analyst with brokerage
Ipopema. Warsaw's stock index fell 2 percent by 1408 GMT, with
the part-index of listed banks shedding over 4 percent. On Friday Polish central bank (NBP) Governor Adam Glapinski,
who had proposed Chrzanowski to succeed him, denied speculation
that he might also quit. The turmoil came as the latest Brexit developments weighed
heavily on sentiment. Central European currencies reversed early
gains after a report that British lawmakers planned to bring a
vote of no confidence against Prime Minister Theresa May over a deal to quit the European Union. The forint and the crown later regained
some ground, but the zloty sank further, touching a 2-week low
at 4.3184 against the euro. At 1418 GMT it traded at 4.307, down
0.4 percent. The Polish currency's decline was in part due to the
corruption scandal, but Brexit was also a factor, said Mateusz
Bieniek, dealer at Santander Bank Polska. "Brexit is very important for Poland, even more so than for
other countries in the region, because the United Kingdom is a
really important trade partner for Poland," Bieniek said. Other market participants said the main impact of the twists
and turns of the Brexit talks on the region's markets came via
flows into and from big currencies such as sterling, the euro and the dollar. "The Brexit news caused quite fast movements in sterling and
the euro/dollar. The forint got affected via the dollar," one
Budapest-based dealer said. Polish government bond yields rose due to domestic factors,
said Michal Zak, fixed income dealer of mBank. "The main reason is yesterday’s bond auction. The turnover
was bigger than usual and a big chunk of bonds sold during this
auction were long-term, he said. The yield on 10-year Polish bonds rose 4 basis points to
3.2775 in the secondary market. CEE SNAPSHOT AT MARKETS 1518 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.9800 26.0000 +0.08% -1.69% crown > Hungary <EURHUF= 321.6200 321.7900 +0.05% -3.33% forint > Polish <EURPLN= 4.3070 4.2901 -0.39% -3.03% zloty > Romanian <EURRON= 4.6650 4.6640 -0.02% +0.32% leu > Croatian <EURHRK= 7.4310 7.4253 -0.08% -0.01% kuna > Serbian <EURRSD= 118.1000 118.1900 +0.08% +0.34% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1078.86 1081.030 -0.20% +0.06% 0 Budapest 39131.59 39070.97 +0.16% -0.62% Warsaw 2163.02 2202.91 -1.81% -12.12% Bucharest 8571.10 8573.66 -0.03% +10.54% Ljubljana <.SBITOP 817.42 815.59 +0.22% +1.37% > Zagreb 1747.73 1749.13 -0.08% -5.16% Belgrade <.BELEX1 745.70 752.56 -0.91% -1.86% 5> Sofia 595.05 595.74 -0.12% -12.16% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 1.5750 0.1110 +223bps +11bps R> 5-year <CZ5YT=R 1.8420 0.0230 +207bps +1bps R> 10-year <CZ10YT= 2.1110 0.0160 +174bps +1bps RR> Poland 2-year <PL2YT=R 1.6170 -0.0050 +227bps -1bps R> 5-year <PL5YT=R 2.5180 0.0430 +275bps +3bps R> 10-year <PL10YT= 3.2970 0.0580 +293bps +5bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.20 2.34 2.44 2.00 <PRIBOR= > Hungary 0.34 0.60 0.94 0.13 Poland 1.77 1.82 1.88 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Additional reporting by Jan Lopatka from Prague and Marcin
Goclowski in Warsaw
Editing by Keith Weir and Raissa Kasolowsky) 

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